Tax Advantages
 
North Carolina's National College Savings Program Gives You Real Tax Advantages.

If you are a North Carolina taxpayer, you are eligible for a state income tax deduction when you contribute to the NC 529 Plan.

For the current tax year, the deductible amounts are $2,500 for an individual and $5,000 for a married couple filing jointly. You should consult your financial, tax, or other advisor to learn more about how this may apply to your specific circumstances.

State income tax forms may reference contributions made to an account in the Parental Savings Trust Fund of the State Education Assistance Authority. This is the Trust Fund that holds all the assets of North Carolina's National College Savings Program.

Account earnings in NC's 529 plan are free from federal and, if you are a resident of NC, North Carolina income taxes when you use the money to pay for Qualified Higher Education Expenses.

 Tax Advantages
 
Withdrawals for Qualified Higher Education Expenses are exempt from both NC and federal income taxes. If your Beneficiary receives a scholarship or attends a U.S. military academy, Withdrawals for an amount not more than the scholarship or for an amount not more than the cost of advanced education at a U.S. military academy are without penalty; however, the earnings portion of these types of Withdrawals are subject to federal and may be subject to state income taxes. If a Withdrawal is requested from the Protected Stock Fund due to the Beneficiary's death, disability or receipt of scholarship there is a 5% surrender charge.

See the Program Description for more detail on types of Withdrawals and tax implications.

If you are not a resident of NC, you may also wish to consult an advisor in your state for your state's exemptions.
Remember, your savings can pay for tuition and expenses at virtually any college anywhere.

The features of a qualified tuition program are complex and involve significant tax issues. The earning portion of Withdrawals not used for Qualified Higher Education Expenses are subjected to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax benefits may be contingent on meeting other requirements.